Why Stablecoins Worry the Swiss National Bank

The SNB is warning that large stablecoins could weaken the route through which interest rate decisions reach the economy. Petra Tschudin, one of the Swiss National Bank’s three governing board members, raised the concern at an event in Zurich on September 30, 2026, hosted by ETH Zurich’s KOF economic research institute.

Stablecoins are digital tokens designed to maintain a stable value against a currency or other asset. Their appeal lies in faster payments and potentially cheaper international transfers. Their growth could also change how money moves through Switzerland’s financial system. The SNB’s concern focuses on large issuers that operate outside the established two tier model, where the central bank supplies liquidity to commercial banks and banks transmit monetary conditions to households and companies.

If substantial payment activity shifted into stablecoin networks, the SNB could have less visibility over liquidity flows and less direct influence over the institutions handling them. Tschudin said that would create a situation in which central banks find it harder to fulfil their mandates.

The warning comes as Swiss policymakers weigh how far financial innovation should proceed without weakening the central bank’s operating framework. For now, the SNB says domestic stablecoin adoption and volumes remain low, limiting immediate financial stability risks.

The risk begins with the way stablecoins could sit outside the banking channels that carry SNB decisions into the wider economy. When the SNB changes its policy stance, commercial banks adjust funding conditions, deposit rates and lending terms. Those changes influence borrowing, spending and investment across Switzerland.

A large stablecoin system could create a parallel payment and settlement infrastructure. Users might hold tokens issued by private companies, transfer them directly and keep fewer funds within bank accounts. The source does not quantify such a shift, and Swiss adoption remains limited. Tschudin’s warning concerns the policy challenge that could emerge if these networks reach significant scale.

The issue also involves convertibility. The SNB has previously cautioned that stablecoins may fail to deliver the promised one to one conversion into traditional money under stress. A loss of confidence could prompt rapid redemptions, with consequences for the banks, assets or reserves connected to an issuer.

Tschudin did not dismiss the technology. She said modernising payments makes sense and described competition between banks and stablecoin providers as a force that can encourage innovation. The regulatory task is to preserve that competition while ensuring that private payment instruments do not escape safeguards applied to banks.

Switzerland has spent three years testing central bank money on a blockchain, with the experiment scheduled to run until at least 2028. The project issues a wholesale central bank digital currency, or CBDC, for banks and other financial market participants rather than consumers.

That design reflects the SNB’s focus on the infrastructure behind financial markets. A central bank liability can support settlement between regulated institutions while preserving the existing relationship between the SNB and commercial banks. The pilot allows participants to examine how tokenised transactions work in practice, including the movement and settlement of digital assets.

Tschudin, who oversees the SNB’s foreign exchange portfolio and digital projects, said the platform currently handles limited activity. “It’s not extremely big volumes that are traded there,” she said. The SNB believes the market is moving in this direction, although the expected acceleration has not arrived.

The Swiss experiment differs from retail CBDC programmes in China and the euro area, where policymakers are examining digital money for everyday users. The SNB continues to argue that the benefits of a retail CBDC do not outweigh its risks. Those risks include changes to bank funding and the possibility of consumers shifting deposits into central bank money during periods of stress.

Policymakers face a choice between extending existing financial rules and creating a separate framework for stablecoin issuers. The source does not set out a final Swiss regulatory model, yet Tschudin’s warning points to the issues any framework must address: reserve quality, redemption at par, supervision, payment resilience and the relationship with commercial banks.

A stablecoin used by Swiss companies for international payments could reduce costs and settlement delays. That benefit matters for an economy whose businesses trade extensively across borders. It also creates questions about where reserves are held, who can redeem tokens and which authority responds if an issuer faces a run.

The SNB says local risks are currently small because adoption and transaction volumes remain low. That assessment gives policymakers room to develop rules before stablecoins become embedded in daily payments. Waiting until a private network becomes systemically important would leave fewer options for supervisors and the central bank.

Regulation will also determine whether banks and stablecoin companies compete on comparable terms. Banks face capital, liquidity and conduct requirements. Issuers that provide payment services without comparable obligations could gain an advantage, while rules that are too restrictive could suppress useful innovation. Switzerland’s challenge is to set standards that apply to the function and scale of an instrument, rather than its branding.

For Swiss households, the immediate impact is limited, while the policy debate is moving ahead of mass adoption. The SNB says stablecoins currently pose small domestic financial stability risks because Swiss volumes and usage remain low. The bank’s wholesale CBDC also has limited trading activity and cannot be held by consumers.

That leaves Switzerland with time to test infrastructure, clarify supervision and observe how stablecoin markets develop abroad. The SNB’s position combines caution about private digital money with continued experimentation in institutional settlement. Its wholesale project will continue until at least 2028, giving the central bank more evidence about tokenised markets and the practical demand for central bank money.

The next decisions will shape how Swiss banks handle deposits, how companies make international payments and how quickly monetary policy moves through the economy. They will also define the responsibilities of private issuers whose tokens promise stable value and easy conversion.

Tschudin’s remarks put the debate in practical terms. Digital payments can lower costs and bring competition. Large private networks could also complicate the SNB’s mandate if they become important channels for money outside the banking system. Switzerland’s regulators now have to decide which safeguards should arrive before that possibility becomes a domestic reality.